LASALLE HOTEL PROPERTIES (NYSE:LHO) Files An 8-K Entry into a Material Definitive AgreementItem 7.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On September18, 2018, LaSalle Hotel Properties (the “Company” or “LaSalle”), LaSalle Hotel Operating Partnership, L.P. (the “Operating Partnership”), Pebblebrook Hotel Trust (“Parent” or “Pebblebrook”), Pebblebrook Hotel, L.P. (“Parent OP”), Ping Merger Sub, LLC (“Merger Sub”) and Ping Merger OP, LP (“Merger OP”), entered into an amendment (the “Amendment”) to the Agreement and Plan of Merger, dated as of September 6, 2018 (the “Merger Agreement”), by and among, the Company, the Operating Partnership, Parent, Parent OP, Merger Sub and Merger OP.
In connection with the execution of the Amendment, the Company and Parent evaluated the number of common shares that could be earned and vested under the Company’s outstanding performance-based share award agreements and reviewed the severance payments, including potential Section 280G tax gross-up payments, that would be payable to senior officers of the Company upon the closing under the Merger Agreement. In connection therewith, the Company and Parent also reviewed valuations of the Company’s non-compete agreements that were prepared by consultants of the Company, which estimated that such non-compete agreements could result in an estimated cost savings of approximately $13 million to $14 million to the combined company following the closing under the Merger Agreement. In consideration of the senior officers’ cooperation in coordination with the foregoing and in order to avoid uncertainty, the Company and Parent have agreed, and the Amendment provides, that, immediately prior to the merger effective time, each of the Company’s outstanding performance awards, including those held by the Company’s executive officers, will automatically become earned and vested with respect to 180% of the target number of common shares subject to such performance awards.
The foregoing summary is qualified in its entirety by reference to the Amendment, a copy of which is attached hereto as Exhibit 2.1 and is incorporated by reference herein.
Item 7.01. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
On September 18, 2018, in connection with the execution of the Amendment, each of the Company’s executive officers, Michael D. Barnello, President and Chief Executive Officer, Kenneth G. Fuller, Executive Vice President, Chief Financial Officer, Secretary and Treasurer, and Alfred L. Young, Jr., Executive Vice President and Chief Operating Officer, signed a letter agreement with the Company consenting to the treatment of the outstanding performance-based share awards set forth in the Amendment. In addition, on September 18, 2018, Parent entered into side letter agreements with each of Messrs. Barnello and Young relating to the Section 280G tax gross-up provisions in their change in control severance agreements.
The foregoing summary is qualified in its entirety by reference to the performance-based share award letter agreements and side letter agreements, copies of which are attached hereto as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5 and are incorporated by reference herein.
Item 7.01.REGULATION FD DISCLOSURE.
On September 18, 2018, the Company and Parent issued a joint press release announcing that Parent has filed a preliminary joint proxy statement/prospectus as part of a registration statement on Form S-4 with the Securities and Exchange Commission (the “SEC”) in connection with the previously announced merger and other transactions contemplated by the Merger Agreement. A copy of such press release is furnished as Exhibit 99.1 to this report.
The information in Item 7.01 of this report, including the information in the press release attached as Exhibit 99.1 to this report, is furnished to Item 7.01 of Form 8-K and shall not be deemed “filed” for the purposes of Section18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. Furthermore, the information in Item 7.01 of this report, including the information in the press release attached as Exhibit 99.1 to this report, shall not be deemed to be incorporated by reference in the filings of the registrant under the Securities Act of 1933, as amended.
Item 7.01. FINANCIAL STATEMENTS AND EXHIBITS.
Amendment No. 1 to the Agreement and Plan of Merger, by and among Pebblebrook Hotel Trust, Pebblebrook Hotel, L.P., Ping Merger Sub, LLC, Ping Merger OP, LP, LaSalle Hotel Properties and LaSalle Hotel Operating Partnership, L.P., dated as of September 18, 2018
Side letter agreement with Michael D. Barnello, dated September 18, 2018
Side letter agreement with Alfred L. Young, Jr., dated September 18, 2018
Press release, dated September 18, 2018
The information contained in the press release attached as Exhibit 99.1 to this report shall not be deemed “filed” for the purposes of Section18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. Furthermore, the information contained in the press release attached as Exhibit 99.1 to this report shall not be deemed to be incorporated by reference in the filings of the registrant under the Securities Act of 1933, as amended.
Additional Information about the Proposed Merger Transaction and Where to Find It
This communication relates to the proposed merger transaction to the terms of the Agreement and Plan of Merger, dated as of September 6, 2018, as amended on September 18, 2018, by and among, LaSalle, the Operating Partnership, Pebblebrook, Parent OP, Merger Sub and Merger OP. In connection with the proposed merger transaction, on September 18, 2018, Pebblebrook filed with the SEC a registration statement on Form S-4 (which registration statement has not yet been declared effective) that included a preliminary joint proxy statement/prospectus of Pebblebrook and LaSalle that also constitutes a prospectus of Pebblebrook (which joint proxy statement/prospectus has not yet been declared effective). Pebblebrook and LaSalle also plan to file other relevant documents with the SEC regarding the proposed merger transaction. INVESTORS ARE URGED TO READ THE PRELIMINARY JOINT PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER TRANSACTION. You may obtain a free copy of the preliminary joint proxy statement/prospectus and other relevant documents (if and when they become available) filed by Pebblebrook or LaSalle with the SEC at the SEC’s website at www.sec.gov. Copies of the documents filed by Pebblebrook with the SEC will be available free of charge on Pebblebrook’s website at www.pebblebrookhotels.com or by contacting Pebblebrook’s Investor Relations at (240) 507-1330. Copies of the documents filed by LaSalle with the SEC will be available free of charge on LaSalle’s website at www.lasallehotels.com or by contacting LaSalle’s Investor Relations at (301) 941- 1500.
Certain Information Regarding Participants
Pebblebrook and LaSalle and their respective trustees, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed merger transaction. You can find information about Pebblebrook’s executive officers and trustees in Pebblebrook’s definitive proxy statement filed with the SEC on April 27, 2018 in connection with Pebblebrook’s 2018 annual meeting of shareholders. You can find information about LaSalle’s executive officers and directors in LaSalle’s definitive proxy statement filed with the SEC on July30, 2018 in connection with its 2018 special meeting of shareholders. Additional information regarding the interests of such potential participants is included in the preliminary joint proxy statement/prospectus and will be included in other relevant documents filed with the SEC if and when they become available. You may obtain free copies of these documents from Pebblebrook or LaSalle using the sources indicated above.
No Offer or Solicitation
This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section10 of the Securities Act of 1933, as amended (the “Securities Act”).
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this communication that are not in the present or past tense or that discuss the expectations of Pebblebrook and/or LaSalle are forward-looking statements within the meaning of Section27A of the Securities Act and Section21E of the Securities Exchange Act of 1934, as amended. These forward looking statements, which are based on current expectations, estimates and projections about the industry and markets in which Pebblebrook and LaSalle operate and beliefs of and assumptions made by Pebblebrook management and LaSalle management, involve uncertainties that could significantly affect the financial results of Pebblebrook or LaSalle or the combined company. Pebblebrook and LaSalle intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions. Words such as “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” and variations of such words and similar expressions are intended to identify such forward looking statements, which generally are not historical in nature. Such forward-looking statements may include, but are not limited to, statements about the anticipated benefits of the proposed merger transaction, including future financial and operating results, the attractiveness of the value to be received by LaSalle shareholders, the attractiveness of the value to be received by Pebblebrook and the combined company’s plans, objectives, expectations and intentionsand descriptions relating to these expectations.
All statements that address operating performance, events or developments that Pebblebrook and LaSalle expect or anticipate will occur in the future — including statements relating to expected synergies, improved liquidity and balance sheet strength — are forward looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Although Pebblebrook and LaSalle believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, Pebblebrook and LaSalle can give no assurance that their expectations will be attained and therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward looking statements. Some of the factors that may affect outcomes and results include, but are not limited to: (i)the outcome of any legal proceedings that may be instituted against the companies and others related to the proposed merger transaction, (ii)unanticipated difficulties or expenditures relating to the proposed merger transaction, the response of business partners and competitors to the announcement of the proposed merger transaction, and/or potential difficulties in employee retention as a result of the announcement and pendency of the proposed merger transaction, (iii)changes affecting the real estate industry and changes in financial markets, interest rates and foreign currency exchange rates, (iv)increased or unanticipated competition for the companies’ properties, (v)risks associated with the hotel industry, including competition for guests and meetings from other hotels and alternative lodging companies, increases in wages, energy costs and other operating costs, potential unionization or union disruption, actual or threatened terrorist attacks, any type of flu or disease-related pandemic and downturns in general and local economic conditions, (vi)the availability and terms of financing and capital and the general volatility of securities markets, (vii)the companies’ respective dependence on third-party managers of their respective hotels, including their inability to implement strategic business decisions directly, (viii)risks associated with the real estate industry, including environmental contamination and costs of complying with the Americans with Disabilities Act of 1990, as amended, and similar laws, (ix)the possible failure of the companies to maintain their respective qualifications as a REIT and the risk of changes in laws affecting REITs, (x)the possibility of uninsured losses, (xi)risks associated with redevelopment and repositioning projects, including delays and cost overruns, (xii)the risk of a material failure, inadequacy, interruption or security failure of the companies’ or their respective hotel managers’ information technology networks and systems, (xiii)risks associated with achieving expected revenue synergies or cost savings, (xiv)risks associated with the companies’ ability to consummate the proposed merger transaction and the timing of the closing of the proposed merger transaction, and (xv)those additional risks and factors discussed in reports filed with the SEC by Pebblebrook and LaSalle from time to time, including those discussed under the heading “Risk Factors” in their respective most recently filed reports on Forms 10-K and 10-Q. Neither Pebblebrook nor LaSalle undertakes any duty to update any forward-looking statements appearing in this document.
LaSalle Hotel Properties ExhibitEX-2.1 2 lhoex21september182018.htm EXHIBIT 2.1 Exhibit Exhibit 2.1AMENDMENT NO. 1TO THEAGREEMENT AND PLAN OF MERGERBY AND AMONG:PEBBLEBROOK HOTEL TRUST,…To view the full exhibit click
About LASALLE HOTEL PROPERTIES (NYSE:LHO)
Lasalle Hotel Properties is a self-administered and self-managed real estate investment trust (REIT). The Company primarily buys, owns, redevelops and leases upscale and luxury hotels located in convention, resort and urban business markets. The Company owns interest in approximately 50 hotels with over 12,000 guest rooms located in approximately 10 states and the District of Columbia. LaSalle Hotel Lessee, Inc. (LHL) is the Company’s subsidiary. The Company’s hotels are leased to LHL that provides for rental payments. The Company’s assets are held by, and all of its operations are conducted through, LaSalle Hotel Operating Partnership, L.P. (the Operating Partnership). The Company is the general partner of the Operating Partnership. The hotels, in which the Company has interests include Hotel Amarano Burbank, Hilton San Diego Gaslamp Quarter, Hotel Solamar, San Diego Paradise Point Resort and Spa, The Hilton San Diego Resort and Spa, and Harbor Court Hotel.